THE Co-operative Bank turned down é8.7 million in business last year due to ethical and ecological policies, figures showed today.

The Manchester-based society said it had reaped the rewards of its stance on issues such as the environment - with more than a third of customers joining up because of these policies.

The amount turned down rose from é6.9 million the previous year, and included é3.8 million of business refused on ecological grounds and é1.3 million for animal welfare reasons.

This in turn boosted profits, with 34 per cent of the é132 million profits it made last year attributed to its ethical policies, up from 29 per cent in 2003.

Surge

The bank said the increase included a surge in the number of companies investing cash at the Co-op.

Director of corporate affairs Simon Williams said: "When we launched our ethical stance back in 1992, its initial appeal was very much to individual customers who wanted to know what happened to their money while it was in the bank.

"Now 36% of personal customers and a quarter of the bank's corporate customers join us because we are prepared to turn away certain sorts of business."

The Co-op employs more than 4,200 people at 100 branches in the UK and has two million customers. It is part of Co-operative Financial Services (CFS) that includes the Co-operative Insurance Society (CIS) and has more than seven million customers.

It has a strategy of investing in companies involved in fair trade or social enterprise and avoiding groups such as tobacco firms, companies which damage the environment and those which supply arms to oppressive regimes.

Today's figures were based on results released last month, which showed that pre-tax profits rose by 1.5 per cent to é132 million in the year to January 8 - marking its 11th consecutive year of record profits.